Language

Site Search:

Whether buying a townhouse or selling a luxury apartment, leasing corporate office space or renting your property, our experts make it their business to understand your needs and help you find the right property.

Founded in the UK in 1855, Savills is one of the world's leading property agents. Our experience and expertise spans the globe, with 600 offices across the Americas, Europe, Asia Pacific, Africa and the Middle East.

Publication

Market in Minutes - Germany residential investment market Q1 2018

Purchasers of developments are increasingly exploring locations outside of the A-cities

The German residential investment market enjoyed the most dynamic start to a year since the record year of 2015. The transaction volume in the first quarter of 2018 totalled around €4bn (see Graph 1), representing an increase of 9% compared with the opening quarter of last year.

The top seven cities accounted for 36% of the transaction volume (Table 1), which is materially ahead of the five-year average of 48%. The fundamentals favour investments outside of the A-cities. The number of households, and hence demand for housing, is expected to rise in around half of all districts (in German: Kreis) and urban districts (in German: Landkreis) by 2030.

In the B, C, and D-cities, rents for first-time occupation have risen more sharply than in the A-cities over the last five years. This could explain why locations outside of the A-cities were also responsible for a higher proportion of investment volume with regard to development deals. These locations accounted for 46% of investment volume in the first quarter of 2018 compared with a five-year average of only around 33%.

Average prices per apartment fell marginally in March (Graph 4), which was primarily attributable to the Buwog acquisition. The 11% decline in the number of transactions since 2017 (Graph 2) suggests that the supply has become even scarcer. Consequently, prices are likely to remain at a high level going forward. We expect a transaction volume for the full year of up to EUR 15bn.